Explanatory Note
In the Current Report onForm 8-K filed by CommScope Holding Company, Inc. (the “Company”) on February 15, 2019 (the “InitialForm 8-K”), the Company announced the appointment of Bruce McClelland as Chief Operating Officer, effective following completion of the Company’s acquisition of ARRIS International plc (“ARRIS”). At the time of the filing of the Initial Form8-K, the Company had not yet finalized the details of Mr. McClelland’s compensation and noted that it would amend the Initial Form8-K to include a description of any material plan, contract or arrangement it entered into with Mr. McClelland in connection with his appointment as Chief Operating Officer, or any grant or award to Mr. McClelland under any such plan, contract or arrangement in connection with such event.
On April 4, 2019, the Company completed its acquisition of ARRIS. This Current Report onForm 8-K/A amends the InitialForm 8-K to confirm the appointments described above and to disclose certain compensation and related agreements entered into with Mr. McClelland in connection with his appointment and employment with the Company.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On April 4, 2019, the Company completed its acquisition of ARRIS and, as previously disclosed in the InitialForm 8-K, Bruce McClelland was appointed as Chief Operating Officer of the Company and Morgan Kurk, who was previously the Company’s Chief Operating Officer, became Chief Technology Officer of the Company effective upon such acquisition.
As Chief Operating Officer of the Company, Mr. McClelland will receive an annual base salary of $925,000, which is consistent with his compensation with ARRIS. As part of the acquisition, the Company succeeded to the Amended and Restated Employment Agreement, dated as of August 23, 2016, by and between ARRIS Group, Inc. and Mr. McClelland (the “Employment Agreement”). The original term of the Employment Agreement was one year, and the term extends for one day for each day Mr. McClelland remains employed. If not terminated earlier, the Employment Agreement will terminate on Mr. McClelland’s 65th birthday.
Pursuant to the Employment Agreement, Mr. McClelland is eligible to participate in the Company’s annual incentive program, with a target bonus opportunity equal to 100% of his annual base salary and a maximum bonus opportunity equal to 200% of his annual base salary. He also is eligible to receive equity awards under the Company’s equity plans, and to participate in any executive perquisite and fringe benefit programs maintained by the Company, on a basis not less favorable than those provided by the Company to executives in comparable positions.
The Employment Agreement provides that in the event Mr. McClelland’s employment is terminated by the Company without cause or by Mr. McClelland due to the Company’s material breach of the Employment Agreement, he will be entitled to receive severance equal to two years’ salary and target bonus, paid in installments over a24-month period, payments equal to the cost of continuing medical, life and disability coverage during such24-month period (calculated as if he was still employed), accelerated vesting of all time-based equity awards, and continued vesting of all service-based equity awards. In the event of his termination without cause or resignation for good reason within one year following a change in control, such severance amounts will be paid in a lump sum, with the bonus component based upon his average incentive bonus over the prior two years instead of target, he will receive a pro rata bonus for the termination year, and all of his equity awards will accelerate, with any performance-based vesting being determined by the board of directors or the compensation committee in its good faith discretion. If the payments owed to Mr. McClelland as a result of the termination following a change of control would be subject to the excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended, then the amount of such payments will be reduced to extent necessary to avoid the excise tax.
